Proposed Change in Tax deducted at source ( TDS ) rates From June 1, 2016

Under Income Tax Act,1961, every person responsible for paying specified amount to any person is required to deduct Tax Deducted at source and pay it to Central Government within specified time. It is applicable based on monitory limits and other person / payment specific payments.

The Finance Minister Mr Arun Jaitley has proposed to modify percentage and monetary limits of tax deduction w.e.f June 1, 2016.

The following table gives a gist of old and new rates applicable from June 1, 2016 and limits for deduction of TDS other than TDS on salary.

Sr. No.

Main Section

Heads

Description

Existing Rate of TDS

Existing Threshold Limit (Rs.)

Proposed Rate of TDS

Proposed Threshold Limit (Rs.)

           

w.e.f. 01/06/2016

               

1

192 A

Payment of accumulated balance due to an employee

 

10%

                     30,000

10%

                   50,000

               

2

193

Interest on Securities

Debentures by government

10%

                     10,000

10%

                   10,000

     

Debentures by listed company

10%

                       5,000

10%

                     5,000

               

3

194

Deemed Dividend

 

10%

                       2,500

10%

                     2,500

               

4

194 A

Interest other than on Securities

For interest from post office

10%

                     10,000

10%

                   10,000

     

For other schemes

10%

                     50,000

10%

                   50,000

               

5

194 B

Winnings form Lotteries/Puzzle/ Game

 

30%

                     10,000

30%

                   10,000

               

6

194 BB

Winnings from Horse Race

 

30%

                       5,000

30%

                   10,000

               

7

194 C

Contract

With Individual and HUF

1%

One Contract- 30,000

 

One Contract- 30,000

     

With persons other than Individuals and HUF

2%

Aggregate Annual Limit- 75,000

 

Aggregate Annual Limit- 100,000

               
               

8

194 D

Insurance Commission

 

10%

                     20,000

5%

                   15,000

               

9

194 DA

Payment in respect of Life Insurance Policy

 

2%

                   100,000

1%

               100,000

               

10

194 E

Non – Resident Sportsman and Entertainer

 

20%

 

20%

 
               

11

194 EE

Payments in respect of NSS Deposits

 

20%

                       2,500

10%

                     2,500

               

12

194 G

Commission on sale of Lottery Tickets

 

10%

                       1,000

5%

                   15,000

               

13

194 H

Commission or Brokerage

 

5%

                       5,000

5%

                   15,000

               

14

194 I

Rent

Plant and Machinery

2%

                   180,000

2%

               180,000

     

Land, building and Furniture

10%

                   180,000

10%

               180,000

               

15

194 IA

Transfer of Immovable Property (w.e.f. 01.06.2013)

 

1%

               5,000,000

1%

             5,000,000

               

16

194 J

Professional Fees

 

10%

                     30,000

10%

                   30,000

               
               

17

194 K

Income in respect of Units

For Company

15%

                     10,000

To be omitted w.e.f 01.06.2016

 
     

For other payees

20%

                     10,000

   
               

18

194 L

Payment of Compensation on Acquisition of Capital Asset

 

10%

                   100,000

To be omitted w.e.f 01.06.2016

 
               

19

194 LA

Payment of Compensation on Acquisition of certain Immovable Property

 

10%

                   200,000

10%

               250,000

               

20

194 LB

Payment of Interest by an Infrastructure Debt Fund to Non-Resident

 

5%

 

5%

 
               

21

194 LC

Interest paid by specified company to non-resident for borrowing from a source outside India

 

5%

 

5%

 

 

In case of any queries on above topic, feel free to drop an email on [email protected]

 

Charvik Momaya

About Charvik Momaya

Charvik finished his articleships from APD and joined a reputed firm called N M Raiji & Co. for two years. He joined back APD with wide exposure in the field of Audits under Income Tax, VAT, Companies Act, etc. Apart from this, Charvik focuses on compliance assurance from management standpoint. He provides value addition to the clients in form of control lapses and proactive compliance management so as to avoid regulatory traps. Charvik has a strong understanding of the laws visa-vis the business scenarios.He has worked with companies like Gratuity Funds, Mutual Fund, Consumer Durables, Asset Reconstruction Company amongst others.

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